Bitcoin Forecast: Making a Decision Soon
Bitcoin had exploded to the upside during the weekend trading as the Chinese President suggested that China was looking forward to exploring the block chain and touted the benefits of all things related to block chain. This was seen as a “green light” going forward for Bitcoin by the Chinese government, which has been one of the biggest nemesis of the crypto markets as the communist party continues to levy capital outflow controls on the mainland. That being said, now that larger players are back to work, we need to look at the Bitcoin market for what it is, not what it “could be.”
There is a long way to go before the Chinese embrace the idea of letting crypto currency run rampant, because every time there is a sign of capital controls coming to the mainland, you will see a sudden spike in Bitcoin. It is a way that party leaders and those well-connected within the Chinese government sneak money out of the country before the rest of the population is forced to keep money put. There are a multitude of reasons for this to go well beyond the scope of this article, but quite frankly China can’t afford much in the way of capital outflow.
That being said, that’s exactly what drove Bitcoin higher over the last several months. We have now seen the market spike over the weekend and then just kind of sit still at the bottom of the previous descending triangle. The fact that the Tuesday session was quiet is a bit telling, but it isn’t a signal in and of itself. A breakdown below the 200 day EMA would lead to a little bit more selling confidence but buying certainly can’t be done until we break above the highs and get a daily close above $10,000, something that I had been tallying for some time. Granted, we got there in a hurry over the weekend, but could not maintain that large figure. This tells me that once the mania cools off there’s a good chance that we break down again. However, price is king and therefore paying attention to what happens next is the most crucial way to trade this market. I would point out that the spike from the early Monday session caught the exact point of breakdown to the most recent lows. The fact that we stopped right there tells me that a break above the highs for the Monday session could in fact kick off something crucial.
- Currency Pairs